Browsing by discipline "Ympäristöekonomia"

In many parts of the world water is a scarce resource that needs to be managed sustainably and efficiently. In Chancay-Huaral basin in coastal Peru, water is distributed mainly between upstream located agriculture and downstream located municipal water supply system. The ever growing demand of water craves for efficient reallocation of the resource. The aim of this thesis is to develop a hydro-economic model for payments for watershed services (PWS) between agricultural and municipal water users. The model reflects changing land quality and is based on profit maximizing behavior of the program participants. The purpose is to study whether the PWS instrument would fit well to the institutional setting and if it encourages to more modest agricultural water use. The main emphasis is on the model but the PWS program design is discussed throughout the study. According to the model results, the PWS scheme does decrease agricultural water use and it provides an incentive for agriculture to participate in PWS program. The agricultural water use depends highly on the land allocation decision that is driven by the profitability of a crop in certain land quality. However, for municipal water supply system the incentive to participate in PWS program is not as strong, because the profit it obtains in the program is zero, whereas in other situations the profits are positive. While agricultural side of the model seems quite sensible, the future research would tackle the issue of linear municipal water demand and elaborate that part of the model. Also the consumers’ willingness to pay for drinking water is an interesting future research topic.

The Paris climate agreement defines a goal of keeping a global temperature rise well below 2°C above pre-industrial levels and to pursue efforts to limit temperature increase to 1.5°C. The Agreement guides United Nations’ Parties towards a low-carbon economy, but reaching this global goal requires that a great amount of current coal and other fossil fuel reserves need to be left in the ground, stranded. This has left investors and other stakeholders pondering whether their carbon-intensive investments could be at risk. Climate risk management has been taken along in investors’ decision making by incorporating knowledge about climate-related topics to gain benefits and to reduce losses. This thesis is based on concepts of corporate social responsibility (CSR) and how institutional investors are working with companies to help deliver the Paris Agreement and accelerate the low-carbon transition. Pension funds form one of the biggest institutional investor groups, and in this thesis I study whether, and how, the five biggest pension funds by assets under management in Finland address climate change and have begun shifting their investments from fossil fuel-based companies to companies advancing the use of renewables or clean technology, or to companies that are in other ways significantly less carbon intensive. The five organisations were selected for this study based on geographical location, earlier studies and rankings, data availability and size of assets under management. This thesis adopts an exploratory multiple case study approach. The study is based on qualitative data gathered from Finnish pension investors’ sustainability and corporate social responsibility reports, climate agendas, and other releases regarding responsible investing, as well as information gained from face-to-face interviews with the pension investors’ responsible investment representatives. The main purpose is to provide a broad understanding on how the pension investors accelerate the low-carbon transition and on the ways climate change is addressed in the sector rather than rank individual pension investors. I find that Finnish pension investors have acknowledged the importance of slowing down climate change and the need to measure, report and reduce carbon footprints. All the pension investors examined in this thesis carry out a climate risk assessment that is integrated in the investment process and calculate the carbon footprint of their direct listed equity investments. This answers to the first part of the research question whether the pension investors address climate change and have begun shifting their investments, and the answer is that yes, they do and have. From there on differences occur on how and to what extent they do that. Above all, climate change is addressed through both risk management and responsibility perspectives, and it is practiced through shareholders’ three traditional choices that are loyalty, exit and voice. Whereas some of the examined investors have policies regarding exclusion of carbon intensive companies, all the interviewed investors highlighted the importance of active ownership, the voice. The field is yet a developing one and best practices are still debated. Comparability and consistency are generally demanded for more comprehensive disclosure and better risk assessment. The results of this thesis add value to the discussion of best practices, however, there is a need for further research about the actual impacts of shareholder activism in regards of mitigating climate change. Also, as reporting and disclosure improve, there could be more possibilities for quantitative research regarding pension investors shifting their investments from fossil fuel-based companies to companies advancing the use of renewables or clean technology, or to companies that are in other ways significantly less carbon intensive.

The objective of the study is to identify and analyse factors affecting the time from project submission to validation and project registration (lead time) of projects in the Clean Development Mechanism (CDM) pipeline. The hypothesis was that since projects have been implemented in China for the longest time and most projects have been in China, the process times would be shortest there. The first two phases of the CDM cycle, i.e. validation and registration, are considered. These are the most crucial stages for a CDM project, since a project will not start generating Certified Emissions Reductions (CERs) before it has been registered. The data used for the study is based on the CDM database collected by UNEP Risoe, which is gathered from the information found at the UNFCCC website. The cut-off date for projects considered in the thesis is the end of April 2010. Four factors influencing the lead times, that can be separated from the data, are considered in the thesis: 1) the validator of the project, 2) the queue in the pipeline at the time the project is submitted, 3) the type of a project and 4) in which region the project is implemented. Two methods were used in the thesis: an empirical study was conducted to assess the effects of the validator, project types, and regions on the lead times; and the effect of the queues in the process phases where analysed with regression analysis. The results show that the processing times in fact are much longer in general than they should be according to the rules and procedures of the CDM, which assign approximately 30 days for each phase. The study shows that queues have indeed had an effect on the lead times of the CDM. The results confirm the hypothesis: the longer the queue, the longer the lead time. The countries where most CDM projects have been developed, mainly China, India and Brazil, do surprisingly not have the shortest lead times. The lead times in China are the longest of all regions, even if only the projects entering the pipeline after 2007 are considered. It seems that other factors weigh more heavily in China’s favor for project implementation. It might be that since CDM projects have been implemented there for the longest time, the project developers are familiar with the process in China and prefer it for that reason.

Sustainable development is a large entity, that as a concept, is still ambiguous and unclear. Since the Brundtland report in 1987, sustainable development has slowly stared to increase its significance in day-to-day activities, where the ongoing UN’s international Agenda 2030 aims yet to increase the progress towards sustainable development across the globe. Sustainable development includes multidimensional economic, environmental and social aspects, where challenges facing sustainability within its dimensions are different in different regions. The ambiguity related to sustainable development lies in its complexity, where measuring progress demands clear and legible applications to ensure the accurate interpretation and communication of the measures. There are many ways to measure sustainable development, and as it is such an immense subject, the transparent procedure behind any sustainable assessment is underlined. This study is a local-level sustainable development performance analysis, that is conducted of all the Finnish local authorities. Sustainability performances are derived as sustainable development scores and ranking positions for each considered local authority via a dataset of 59 indicators. The indicators are aligned with the Agenda 2030 17 SDGs – the sustainability performance assessment is based on indicator data normalization, where normalized indicator data is aggregated to the appointed SDG, and furthermore as the overall sustainable development scores for each local authority. The sustainable development ranks are then derived from the score values as a data arrangement application. Being a data-based examination, data-related characteristics are invoked in this study by computing the sustainable development performance numbers of all the Finnish local authorities four times: once with the original dataset, and three times by applying weights to the data; considering indicator-specific data coverage by the share of population included, indicator-specific coverage by local authority data availability and lastly SDG-specific coverage by the number of indicators aligned. The results after all the four sustainability performance applications show that Kuopio scores the best of all the Finnish local authorities every time. On the contrary, Koski Tl gets the worst performance, also for all the four performance applications. Otherwise, there are movements in ranking positions and sustainable development scores comparing the weighting applications with the non-weighted outcomes. When reviewing the top 10 and bottom 5 local authorities, municipalities of Åland; Jomala, Lemland and Lumparland, for instance improve their performances significantly when applying the weights to indicator coverage by local authority data availability. What can be deduced from this analysis, is that this sustainability performance assessment application is one way of measuring local sustainable development. The outcome of this data-based analysis is dependent on the indicators in use, and the applied minimum-maximum normalization method used in the aggregation process. This study provides an example of a local-level sustainability performance application, that may be utilized and further continued, acknowledging all the variable components, causal relations and data-related challenges that inevitably are present in such assessments. Such aggregated sustainability indicators’ analyses are prone to challenges related to data, where the intent for the given application vary case-by-case and should therefore also be assessed regarding the intended use.

Ilmastonmuutos on yksi aikamme merkittävimmistä ongelmista. Ihminen voimistaa luonnollista kasvihuoneilmiötä erityisesti polttamalla fossiilisia polttoaineita. Yksi suurimmista päästöjen aiheuttajista on liikenne, joka aiheuttaa globaalisti noin 13 prosenttia kasvihuonekaasupäästöistä. Euroopassa liikenteen osuus päästöistä on noin neljännes. Lisäksi kansainvälinen ilmastopaneeli (IPCC) ennustaa, että liikenteen päästöt kasvavat globaalisti nopeammin kuin muiden sektoreiden päästöt. Euroopan komissio on linjannut, että pitkällä tähtäimellä fossiilisia polttoaineita käyttävistä kulkuneuvoista tulee luopua, ja samalla on asetettu tiukat velvoitteet autonvalmistajille päästövähennysten saavuttamiseksi liikennesektorilla. Vuonna 2021 uusien autojen hiilidioksidipäästöt saavat olla keskimäärin ainoastaan 95 grammaa kilometriltä. Myös Suomessa on asetettu tavoitteet liikenteen päästöjen vähentämiseksi. Suomen lyhyen aikavälin suunnitelmana on vähentää liikenteestä aiheutuvia hiilidioksidipäästöjä 40 prosenttia vuoden 1990 tasosta vuoteen 2030 mennessä. Pitkän aikavälin tavoitteena on vähentää liikenteestä aiheutuvia päästöjä 80 prosenttia vuoden 1990 tasosta vuoteen 2050 mennessä. Tämä tarkoittaisi enintään 2,6 Mt päästöjä vuonna 2050. Tässä työssä on tutkittu sähköautoja vaihtoehtona polttomoottoriautoille. Koska sähköauton korkea hankintakustannus on tällä hetkellä suurin este uuden teknologian käyttöönotolle, työssä on selvitetty sähköauton hintakehitystä. Sähköauto on tällä hetkellä noin 10 000- 15 000 euroa kalliimpi kuin vastaava polttomoottoriauto. Hintaero johtuu pääsosin sähköauton kalliista akusta. Kirjallisuuskatsauksen pohjalta on todettu, että sähköauton hankintakustannus vastaa polttomoottoriauton kustannusta, kun akun hinta laskee 100 dollariin kilowattitunnilta. Työssä on ennustettu tämän tapahtuvan vuoteen 2024 mennessä. Lisäksi työssä on laskettu vertaileva kustannusanalyysi kolmen sähköauton ja vastaavan polttomoottoriauton osalta. Esimerkkeinä on käytetty Kia Soul EV sähköautoa sekä bensiiniautoa Kia Soul 1.6 Funk ja dieselautoa Kia Soul 1.6 CRDi Supreme DCT, Nissanin sähköautoa Nissan Leaf Visia, polttomoottoriautoa Nissan Qashqai Visia DIG-T 115 sekä dieselautoa Nissan Qashqai Visia DCI 130 sekä Volksawagen Golf malleja e-Golf, Comfortline 1.5 TSI EVO Blue Motion sekä Comfortline 2.0 TDI Motion. Kyseiset mallit vastaavat moottoreiden teholtaan parhaiten toisiaan, joten ne ovat vertailukelpoisia kustannusanalyysin kannalta. Analyysin perusteella todetaan, että koko elinkaaren kustannuksilta Kia Soul EV ja Nissan Leaf Visia ovat vastaavia polttomoottoriautoja edullisempia. Toisaalta taas isomman akun omaava Volkswagen e-Golf on koko elinkaaren kustannuksilta kalliimpi kuin vastaava polttomoottoriauto. Työssä on myös tutkittu sähköautojen ympäristövaikutuksia. Sähköautojen ympäristövaikutuksia tutkittaessa kävi ilmi, että akun valmistaminen on hyvin energiaintensiivistä. Sähköauton akun valmistuksesta aiheutuvat päästöt ovat 38-356 kg CO2–eq/ kWh. Tästä johtuen sähköauton valmistuksesta aiheutuvat päästöt ovat suuremmat kuin polttomoottoriauton valmistuksesta aiheutuvat päästöt. Sähköauto on kuitenkin ajon aikana vähäpäästöinen tai jopa nollapäästöinen riippuen akkuun ladatun sähkön alkuperästä. Sähköauton valmistuksen aikaiset päästöt kompensoituvat siten nykyisin käytössä olevilla energianlähteillä 70 000 ajokilometriin mennessä. Sähköautot ovat analyysin perusteella varteenotettava vaihtoehto polttomoottoriautoille, kunhan hankintakustannus laskee polttomoottoriautoa vastaavalle tasolle. Sähköautot mahdollistavat liikenteen päästöjen vähentämisen sekä kaupunkien ilmanlaadun parantamisen. Ne eivät kuitenkaan ole yksinään ratkaisu liikenteen päästöihin vaan myös rinnakkaisia toimenpiteitä vaaditaan päästövähennystavoitteiden saavuttamiseksi.

The objective of this thesis was to study the social profitability of combustion technology in poultry manure management in the Leningrad region, Russia. The method was environmental cost-benefit analysis (ECBA), in which two combustion power plant scenarios and a reference scenario were considered. All scenarios would treat 94000 tons of manure annually over a project lifetime of 12 years. Scenario 1 (S1) is a combustion power plant that produces only thermal energy and scenario 2 (S2) is a combustion power plant that produces combined heat and power (CHP). Scenario 0 (S0) is a reference point to the power production scenarios and it assumes that the poultry manure would be disposed untreated by stockpiling or to lagoons, causing nutrient leaching to the surface waters. The final objective of the ECBA was to find out if the scenarios are socially profitable and which one is preferable. The ECBA showed that from the viewpoint of a private producer or investor and under the current market conditions and policy environment, the power plant scenarios were not profitable. However, when environmental benefits of the power plant scenarios were added to the calculations, both scenarios were found to be socially profitable. The social net present values (NPV) of S1 and S2 were EUR 21,2 million and EUR 8,2 million respectively. The reference scenario (S0) led to significant social costs, causing EUR 27,6 million losses to society over the scenarios lifetime. Thus according to the NPV criteria, S1 should be carried out, because it showed the highest NPV. For S0 and S1, the results held constant under all sensitivities, but for S2 several critical parameters were found, from which investment cost was the most significant. Implementation of economic policy instruments would improve the profitability of the scenarios and it would be beneficial to all parties that the main environmental impacts concern (e.g. Sweden and Finland). The nutrient load reduction benefits were the crucial factor that made the power plant scenarios socially profitable. The climate benefits from manure FBC were also significant although moderate if compared to the eutrophication benefits. If the future focus of policies is to reduce the nutrient loads from poultry manure in the Leningrad region, poultry manure combustion with FBC technology could be an effective way to meet that goal.

Lähes kaikki maailman valtiot sitoutuivat Pariisin ilmastosopimuksessa vähentämään päästöjään, jotta maapallon ilmastonlämpeneminen saataisiin rajoitettua kahteen celsius asteeseen. Odotukset kohdistuvat nyt mm. teknologian kehitykseen, ja monet tahot toivovatkin ilmasto-ongelman ratkeavan uusilla puhtaan teknologian innovaatioilla. Puhtaista teknologioista, eli cleantechistä, on muodostunut kiinnostava ja tärkeä sijoituskohde etenkin yhteiskunnallisella tasolla. Tämä on käynnistänyt kansainvälisen kilpailun asemasta parhaana cleantech-startupien kasvualustana. Suomi on listattu usein cleantechin kärkimaihin, ja vuonna 2014 julkistetun cleantech-strategian tavoitteena oli suunnitelmallisesti tehdä Suomesta johtava puhtaiden teknologioden kasvualusta, sekä kasvattaa cleantechistä viennin uusi kärki vuoteen 2020 mennessä. Strategiassa asetettiin neljä tavoitetta: kasvattaa suomalaisten cleantech-yritysten yhteenlaskettu liikevaihto 50:een miljardiin euroon; josta viennin osuus on yli 75%, kaksinkertaistaa kotimaiset cleantech-markkinat noin 20:een miljardiin euroon, kasvattaa cleantech-yritysten määrää kahdesta tuhannesta kolmeen tuhanteen, sekä luoda Suomen cleantech-sektorille ainakin 40000 uutta työpaikkaa. Cleantech-strategia kuitenkin lopetettiin jo vuonna 2015 uuden hallituksen toimesta, ja sen rippeet liitettiin osaksi suurempaa biotalousstrategiaa ilman tavoitteita. Tässä tutkielmassa tarkastellaan cleantech-strategian poistettujen tavoitteiden saavutusmahdollisuuksia hyödyntäen uusien teknologiayritysten rahoitusdataa Suomessa ja Euroopassa, sekä pohditaan politiikkavajeen merkitystä cleantech-sektorin kehityksen hidasteena. Tutkielman metodeiksi on valittu deskriptiivinen tilastollinen tarkastelu, sekä teemojen selvittämiseksi kirjallisuuskatsaus. Datan keräämiseen hyödynnetään pääosin yksityistä Pitchbook -tietokantaa. Pitchbookin valintaan vaikutti datan kattavuus sekä saatavuus. Datan tarkistamiseksi ja täydentämiseksi tutkimusdataa verrataan toiseen yksityiseen tietokantaan nimeltänsä Crunchbase, sekä julkisiin lähteisiin, kuten TEKES, Tilastokeskus ja Kaupparekisteri. Yhteneväinen havainto aiempien tutkimusten (mm. Antikainen ym., 2016) kanssa on saatavilla olevan datan epäjohdonmukaisuus, sekä käytetyn termistön tulkinnanvaraisuus. Tämä vaikeuttaa tarkkojen johtopäätösten tekemistä. Tarkastellun datan perusteella voidaan kuitenkin todeta lähes kaikkien cleantech-strategiaan asetettujen tavoitteiden olevan nykyisellä kehityksellä saavuttamattomissa. Tavoite uusien cleantech-yritysten määrän kasvattamisesta on kuitenkin jo saavutettu, vaikkakin tulos ei ole täyin kiistaton. Muiden tavoitteiden saavuttamiseksi tarvitaan enemmän poliittista ohjausta, etenkin aikaisen vaiheen cleantech-yritysten rahoitusmahdollisuuksien lisäämiseksi. Tutkielman johtopäätökset ovat yhteneviä aikaisempien julkaisujen kanssa, joissa huomautetaan Suomen heikoista aikaisen vaiheen rahoitusmahdollisuuksista (mm. Sworder, 2017). Tarkkojen kehityskohteiden ja parhaiden toimenpiteiden tunnistamiseksi tarvitaan kattavampaa tutkimusta, sekä tarkemman viitekehyksen laatimista tulosten mitattavuuden varmistamiseksi.

The emissions from energy production should be significantly reduced and the key measure is to increase the share of renewable energy sources. In long term, this should be market-based, but so far renewable energy investments have mainly not been launched without state aid. The number of fixed feed-in tariff schemes started to increase in the beginning of the millennium. However, setting up the correct aid levels and especially taking into consideration technological development is extremely difficult. Furthermore, as the amount of renewable energy increases, the expenditure has also increased significantly. Therefore, cost-efficiency has become even more important than before. Recently schemes based on auctions have increased their popularity rapidly. Based on the experiences so far, they have proven to be a good solution for the challenges faced with previous aid schemes. There are several choices to be made when implementing auctions, which have large impact on cost-efficiency or state expenditure. The aim of the thesis has been to create an overall picture of auction schemes, the choices they require and to analyze their cost effects. The main choices are between sliding and fixed premium schemes and whether aid payment is based on the individual bids or uniform price. Previous studies have focused on the comparisons between different systems and general auction theory. In addition, there are several lessons-learned type studies. Common view is that one cannot simply copy a successful auction from one market to another. Therefore, a simulation model created for Finnish conditions makes it possible to try different choices and analyse their impact. Based on the result of the simulation model, sliding premium scheme is more cost-efficient than fixed premium scheme. Correspondingly aid based on every individual bid rather than uniform price, would become less expensive for state. Due to restrictions in the model, it is not possible to reflect the expected behavior of the bidders and thus the bids are truthful and strictly based on costs. Therefore, the real-life implications would most likely be less clear. Nevertheless, the results are in line with previous studies and reports. Due to higher risks in fixed premium scheme, the costs of capital tend to increase in comparison to sliding premium scheme. Schemes based on individual bids should be cheaper than uniform price based scheme, unless there is incentive for the last winner to increase its bid. If there is enough competition, other winning bids should fall below the last winning bid.

The objective of this thesis is to find out how dominant firms in a liberalised electricity market will react when they face an increase in the level of costs due to emissions trading, and how this will effect the price of electricity. The Nordic electricity market is chosen as the setting in which to examine the question, since recent studies on the subject suggest that interaction between electricity markets and emissions trading is very much dependent on conditions specific to each market area. There is reason to believe that imperfect competition prevails in the Nordic market, thus the issue is approached through the theory of oligopolistic competition. The generation capacity available at the market, marginal cost of electricity production and seasonal levels of demand form the data based on which the dominant firms are modelled using the Cournot model of competition. The calculations are made for two levels of demand, high and low, and with several values of demand elasticity. The producers are first modelled under no carbon costs and then by adding the cost of carbon dioxide at 20€/t to those technologies subject to carbon regulation. In all cases the situation under perfect competition is determined as a comparison point for the results of the Cournot game. The results imply that the potential for market power does exist on the Nordic market, but the possibility for exercising market power depends on the demand level. In season of high demand the dominant firms may raise the price significantly above competitive levels, and the situation is aggravated when the cost of carbon dioixide is accounted for. Under low demand leves there is no difference between perfect and imperfect competition. The results are highly dependent on the price elasticity of demand.